SteelMint’s weekly export index for low-grade Indian iron ore fines (Fe 57%) remains stable, w-o-w, at $44/t FoB east coast India. Exports remain absent on weakening demand outlook in China.
The Indian iron ore fines exports market continues to remain weak on rising Chinese production cuts. Also, high coke prices have reduced Chinese mills’ interest in purchases. Nine mills in northeast China have received production cut notices. Mills in Shandong province have been ordered to complete their annual production target by end-Nov’21 as assessments and corrections are planned for Dec.
Towards the beginning of the week, more production cuts were heard to have been implemented in Guangxi, as production restrictions continued to be rolled out.
“Haven’t heard any deals this week as yet. Discounts on low-grade ore have widened further. Price indications may be around $65-70/t CFR China,” shared a trader.
A major Australian iron ore miner has increased the discount for sub-grade iron ore or super special fines (SSF) on the back of falling overseas demand and steel output cuts in China. According to sources, the miner has increased the discount for SSF for Sept to 30% against 27% in Aug. The discounts are based on the Fe 62% index.
Chinese spot iron ore fines Fe 62% prices last weekend increased to $159.05/t CNF China amid climbing port stock prices and the belief that prices may have hit a near-term bottom.
However, prices this week fell further on intensified production curbs by Chinese mills. The spot price of iron ore Fe 62% fines fell by $3.85/t to $139.70/t CFR China on 2 Sept. On a weekly basis, prices fell by around $14/t as against $153.35/t assessed on 26 Aug.
As per data maintained with SteelMint, total iron exports from Indian ports for the week (22-28 Aug) were recorded at 100,650 t compared to 155,310 t a week ago. Exports dropped significantly as compared with the last week of Jul at 243,851 t.
Rationale:
- Price indicators- No confirmed deal was reported in the current publishing window and hence given 0% weightage under T1 trade.
- SteelMint has received six (6) indicative prices and offers during the current publishing window, and two (02) were considered for price calculation as T2 inputs, being given a weightage of 100%.
Market highlights:
- DCE iron ore futures up: DCE iron ore futures’ Jan’22 contract closed at RMB 773.5/t ($120) (+RMB 8.5), d-o-d.
- Iron ore stocks increase at Chinese ports: Iron ore inventory at major Chinese ports increased to 131.4 mn t this week as against 129.4 mn t in the preceding week, as per data maintained by SteelHome.
- Freight rates stable, w-o-w: Freight rates for 50,000-55,000 t export vessels from east coast India (Paradip) to China remained stable at $27/t, w-o-w. However, quarantine and demurrage charges remain matters of pressing concern adding to costs.
- JSW’s low-grade fines auction receives no bids: JSW Steel had scheduled an auction for 23,700 t of Fe 52-55% iron ore fines on 1 Sept. The miner did not receive any bid at the auction with the entire material remaining unsold. The floor price for the auction was at INR 800/t (including royalty, DMF and NMET). The steelmaker has scheduled another auction for 23,700 t of Fe 55%-Fe 58% iron ore fines on 8 Sept. The steelmaker has reduced the floor price for the auction to INR 1,500/t (including royalty, DMF and NMET).
- Goa iron ore e-auction receives moderate response: Goa’s Directorate of Mines and Geology had conducted the 26th iron ore e-auction on 31 Aug. About half of the material, or 0.81 mn t, was booked out of the total of 1.57 mn t on offer. The base price was from INR 350/t to INR 500/t. The material consisted of low-grade fines, lumps and ROM, with Fe 58.01% being the highest grade on offer.
- OMC low grade fines auction received no bids: OMC had conducted iron ore fines e-auction on 31st Aug’21. The miner put to auction a total of 150,000t iron ore fines (Fe 58%) from Koira mines. Entire material remained unsold.
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